Salary dues awaited

Dear All ,
My father worked in a cement company in Meghalaya . He resigned in 2012 . He was not paid for the last 2 years prior to his leaving the company . The dues were around Rs 25 Lacs . We applied for a winding up petition in 2015. The company got registered with BIFR under sick industrial companies act 1985 in 2015 itself .
Now my advocate says that in their counter affidavit they have told that they are a Sick Company and that winding up petition cannot be carried forward till revival period .
Please explain what should be done . Can I transfer the case to Delhi as the company is in Shillong , Meghalaya.

Asked 7 months ago in Business Law from New Delhi, Delhi

1) your father chances of recovery of dues are bleak
2) since company has been referred to BIFR proceedings would be stayed and case adjourned sine die
3) yiu cannot transfer winging up petition to delhi as regd office of company is in Meghalaya

It is his hard earned money . Is there any other way out . We have a strong case in hand in terms of merit . I just need help to come over this legal barrier . Kindly advice.

Asked 7 months ago

1) unfortunately company is a BIFR case
2) you have to file suit within period of 3 years otherwise your claim would be barred by limitation
3) civil recovery suit would also be stayed as company is BIFR case

1. Winding up petition can be taken to a logical conclusion as registration under BIFR is an attempt to defeat the outcome of the winding up petition.
2. The case cannot be transferred from one jurisdiction to another unless you can prove that you are not getting a free and fair trial.

The company got registered with BIFR under sick industrial companies act 1985 in 2015 itself .
Now my advocate says that in their counter affidavit they have told that they are a Sick Company and that winding up petition cannot be carried forward till revival period .
Please explain what should be done . Can I transfer the case to Delhi as the company is in Shillong , Meghalaya.
More and more sick companies in India are using the Board for Industrial and Financial Reconstruction (BIFR) as an escape route to delay legal action by banks for debt recovery even as their loan restructuring under the corporate debt restructuring (CDR) cell and other such mechanisms fail. SICA is a legal mechanism to deal with private and public sector industrial companies that are nearing closure. Its main objective is to determine sickness and expedite the revival of potentially viable units or closure of unviable units, As soon as the restructuring package fails, we classify the account as an NPA (non-performing asset) and the bank would then initiate recovery proceedings against them. But BIFR is becoming an escape route since no legal action can be taken against a company that has been referred there.
The case cannot be transferred to Delhi on such grounds. You have no option than to wait for revival period as advised by your advocate. You may not get any desired relief even though any other step may appear viable.

It is his hard earned money . Is there any other way out . We have a strong case in hand in terms of merit . I just need help to come over this legal barrier
Your feelings can be understood by anyone and every one but nobody will be able to help you that passing sympathies to you, so best action is to wait patiently

I have come to know that though the company has been referrred to BIFR , Canara bank -one of the creditors has challenged and will file objection to the sickness of the company . Therefore the status is - Pending for determination of sickness . There are 2 questions :
1) Will my petition for winding up set aside or dismissed at this stage .
2) Should I file for a recovery suit (civil ) in meghalaya as the company was incorporated . The case is within the three years limitations .
3) Even if revival process fails and the company is declared NPA , the major creditors will get money back by selling assets . Will the appeal of an employee ( my father ) be entertained .
Kindly advice .

Asked 7 months ago

1) your petition wont be dismissed
2) file recovery suit or tiur claim would be barred by limitation later
3) recovery of employee dues would depend upon the assets of the company

1. Winding up petition will be decided on merits and cannot be dismissed summarily due to the reference to BIFR.
2. The recovery suit can be filed where the registered office of company is situated or where the contract was brought into existence.
3. The recovery suit can proceed untrammelled by the declaration of NPA.

1. The creditors application will be decided and on the basis of the same your petition can also be decided.
2. There is no bar in filing the recovery suit against the company, you may proceed with the proposed suit.
3. Once the facts are explained and the court is convinced about your claim there are chances that your claim may also be considered at least pro-rata basis.

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